Social Security Contributions in Malta: What You Need to Know
It is useful for anyone working or running a business in Malta, to be aware of the Social Security contribution payments procedures used to determine the eligibility for social security benefits. Below is a comprehensive guide on how contributions are calculated, paid , and how they determine eligibility for contributory benefits.
How Social Security Contributions Are Calculated
Social security contributions are calculated based on the basic weekly income and are categorised into three distinct classes:
- Class one (1): Paid by employed persons. The contribution is a percentage of the gross basic weekly wage, by both the employer and employee.
- Class two (2): Paid quarterly to the Commissioner for Revenue by self-occupied individuals, based on their declared income.
- Class three (3): Paid by self-employed persons earning income from rents, interests or investments.
The contributions are paid for every Monday, carrying a total of fifty two (52) or fifty three (53) contributions, depending on the number of Mondays in that respective year.
Who is obliged to Pay Social Security Contributions
All persons over the age of sixteen (16) and under the retirement age of sixty five (65) in an insurable employment are obliged to pay social security contributions. This includes:
- Employed Persons: Individuals working under a contract of/for service or apprenticeship.
- Self-Occupied Persons: Individuals earning income from their own trade or profession.
Persons holding more than one part-time job may choose to pay contributions on more than one job (up to a maximum of forty (40) hours), enabling them to benefit from a higher contribution rate and, consequently, a higher pension rate.
Part-time employees working less than eight (8) hours per week with the same employer are not considered in insurable employment for social security purposes, unless their annual earnings exceed nine hundred and ten euros (€910). As a result, they are not obliged to pay contributions.
Persons working both full-time and part-time are to pay Social Security Contributions only from their full-time job.
Unemployed single persons may choose to pay voluntary class two (2) contributions as, self-employed persons, based on their annual income from rents, interests, dividends or a combination of these sources.
Benefits Eligibility
Social security contributions determine the eligibility for contributory benefits, including:
- Retirement Pension: The amount of contributions paid, determine pensionable age, eligibility and pension rate. To qualify for a full pension, one needs a yearly average of at least fifty (50) contributions from the age of nineteen (19) or eighteen (18) if born after nineteen fifty-eight (1958).
- Injury Benefit: Contributions ensure coverage in case of injury at work.
- Unemployment / Sickness Benefit: Days of Benefit eligibility are calculated according to the amount of contribution paid before the claim.
Additional Resources
For further information on Social Security contributions click here.
The website also provides information and guidance on how to apply for benefits together with a list of comprehensive eligibility criteria for each benefit issued by the Department of Social Security.